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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10-QSB



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Quarterly Report Under Section 13 or 15(d)

of the Securities Exchange Act of
1934



For the quarterly period ended September 30, 2004



Commission file number 0-15070



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REGENERX BIOPHARMACEUTICALS, INC.

(Exact name of small business issuer as specified in its charter)



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|                         |  |                           
|------------------------ |  | --------------------------
|Delaware                 |  | 52-1253406                
|(State of Incorporation) |  | (IRS Employer I.D. Number)



3 Bethesda Metro
Center

Suite 700

Bethesda, Maryland 20814

(Address of principal executive offices)



Issuers telephone number, including area code: (301) 961-1992



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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



34,011,486 shares of RegeneRx Biopharmaceuticals, Inc. Common Stock, par value $.001 per share, were outstanding as of September 30, 2004.



Transitional Small Business Disclosure Format (Check
One)    Yes ̈No  x



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##### Table of Contents

RegeneRx Biopharmaceuticals, Inc.

Form 10-QSB

Quarterly Period Ended September 30, 2004



INDEX



|           |  |                       |  |                                                                                                                                |  |      
|---------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | -----
|           |  |                       |  | Page No.                                                                                                                      
|Part I.    |  | Financial Information |  |                                                                                                                               
|           |  |                       | 
|           |  | Item 1.               |  | Financial Statements                                                                                                           |  |      
|           |  |                       | 
|           |  |                       |  | Balance Sheets at September 30, 2004 (unaudited) and December 31, 2003                                                         |  | 3    
|           |  |                       | 
|           |  |                       |  | Statements of Operations for the three and nine months ended September 30, 2004 (unaudited) and September 30, 2003 (unaudited) |  | 4    
|           |  |                       | 
|           |  |                       |  | Statements of Cash Flows for the nine months ended September 30, 2004 (unaudited) and September 30, 2003 (unaudited)           |  | 5    
|           |  |                       | 
|           |  |                       |  | Notes to Financial Statements (unaudited)                                                                                      |  | 6    
|           |  |                       | 
|           |  | Item 2.               |  | Managements Discussion and Analysis or Plan of Operation                                                                      |  | 9-10 
|           |  |                       | 
|           |  | Item 3.               |  | Controls and Procedures                                                                                                        |  | 11   
|           |  |                      
|Part II.   |  | Other Information     |  |                                                                                                                               
|           |  |                       | 
|           |  | Item 1.               |  | Legal Proceedings                                                                                                              |  | 11   
|           |  |                       | 
|           |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                    |  | 11   
|           |  |                       | 
|           |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                                |  | 11   
|           |  |                       | 
|           |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                            |  | 11   
|           |  |                       | 
|           |  | Item 5.               |  | Other Information                                                                                                              |  | 11   
|           |  |                       | 
|           |  | Item 6.               |  | Exhibits                                                                                                                       |  | 12-13
|           | 
|Signatures |  | 14                   



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##### Table of Contents

PART I  FINANCIAL INFORMATION



Item 1. Financial Statements



RegeneRx Biopharmaceuticals, Inc.

Balance Sheets



|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                       |  | September 30,2004 |             |   | December 31,2003 |  
|                                                                                                                                       |  | (unaudited)       |             |   |                  |  
|ASSETS                                                                                                                                 |  |                   |             |   |                  |   |             |  
|Current assets                                                                                                                         |  |                   |             |   |                  |   |             |  
|Cash and cash equivalents                                                                                                              |  | $                 | 2,207,916   |   |                  | $ | 1,019,889   |  
|Due from related parties                                                                                                               |  |                   | 20,574      |   |                  |   | 26,897      |  
|Other current assets                                                                                                                   |  |                   | 125,143     |   |                  |   | 36,428      |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|Total current assets                                                                                                                   |  |                   | 2,353,633   |   |                  |   | 1,083,214   |  
|                                                                                                                                       |  |                  
|Fixed assets, net of accumulated depreciation of $9,416 and $7,613                                                                     |  |                   | 3,172       |   |                  |   | 3,377       |  
|Other Assets, net of accumulated amortization of $4,313 and $2,973                                                                     |  |                   | 192,426     |   |                  |   | 23,227      |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|Total assets                                                                                                                           |  | $                 | 2,549,231   |   |                  | $ | 1,109,818   |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                   |  |                   |             |   |                  |   |             |  
|                                                                                                                                       |  |                  
|Current liabilities                                                                                                                    |  |                   |             |   |                  |   |             |  
|Accounts payable                                                                                                                       |  | $                 | 235,516     |   |                  | $ | 81,268      |  
|Accrued expenses                                                                                                                       |  |                   | 10,694      |   |                  |   | 91,734      |  
|Letter agreements with vendors                                                                                                         |  |                   | 20,046      |   |                  |   | 20,046      |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|Total current liabilities                                                                                                              |  |                   | 266,256     |   |                  |   | 193,048     |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|Commitments                                                                                                                            |  |                   |            |   |                  |   |            |  
|                                                                                                                                       |  |                  
|Stockholders equity                                                                                                                   |  |                   |             |   |                  |   |             |  
|Preferred stock, $.001 par value per share, 1,000,000 authorized; no shares issued                                                     |  |                   |            |   |                  |   |            |  
|Common stock, par value $.001 per share, 100,000,000 shares authorized; 34,011,486 and 30,098,968 issued and outstanding,
respectively |  |                   | 34,011      |   |                  |   | 30,099      |  
|Additional paid-in capital                                                                                                             |  |                   | 43,929,088  |   |                  |   | 40,065,861  |  
|Accumulated deficit                                                                                                                    |  |                   | (41,680,124 | ) |                  |   | (39,179,190 | )
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|Total stockholders equity                                                                                                             |  |                   | 2,282,975   |   |                  |   | 916,770     |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  
|Total liabilities and stockholders equity                                                                                             |  | $                 | 2,549,231   |   |                  | $ | 1,109,818   |  
|                                                                                                                                       |  |                   |             |   |                  |   |             |  



The accompanying notes
are an integral part of these financial statements.



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RegeneRx Biopharmaceuticals, Inc.

Statements of Operations

(Unaudited)



|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|---------------------------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                     |  | Three-months ended September 30, |            |   | Nine-months ended September 30, |  
|                                                     |  | 2004                             |            |   | 2003                            |   |            | 2004 |  |   | 2003       |  
|Revenues                                             |  | $                                |           |   |                                 | $ |           |      |  | $ |           |   |  | $ |           |  
|                                                     |  |                                  |            |  
|Expenses                                             |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Research and development                             |  |                                  | 686,026    |   |                                 |   | 195,355    |      |  |   | 1,661,973  |   |  |   | 561,735    |  
|General and administrative                           |  |                                  | 297,585    |   |                                 |   | 195,212    |      |  |   | 848,951    |   |  |   | 550,331    |  
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total expenses                                       |  |                                  | 983,611    |   |                                 |   | 390,567    |      |  |   | 2,510,924  |   |  |   | 1,112,066  |  
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Operating loss                                       |  |                                  | (983,611   | ) |                                 |   | (390,567   | )    |  |   | (2,510,924 | ) |  |   | (1,112,066 | )
|                                                     |  |                                  |            |  
|Other income (expense)                               |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Interest income                                      |  |                                  | 3,581      |   |                                 |   | 3,069      |      |  |   | 10,026     |   |  |   | 5,641      |  
|Interest expense                                     |  |                                  |           |   |                                 |   |           |      |  |   | (36        | ) |  |   | (42,949    | )
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total other income (expense)                         |  |                                  | 3,581      |   |                                 |   | 3,069      |      |  |   | 9,990      |   |  |   | (37,308    | )
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net loss                                             |  | $                                | (980,030   | ) |                                 | $ | (387,498   | )    |  | $ | (2,500,934 | ) |  | $ | (1,149,374 | )
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic and diluted net loss per common share          |  | $                                | (0.03      | ) |                                 | $ | (0.01      | )    |  | $ | (0.08      | ) |  | $ | (0.04      | )
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Weighted average number of common shares outstanding |  |                                  | 32,959,593 |   |                                 |   | 29,933,425 |      |  |   | 32,497,478 |   |  |   | 27,957,944 |  
|                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  



The accompanying notes
are an integral part of these financial statements.



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RegeneRx Biopharmaceuticals, Inc.

Statements of Cash Flows

(Unaudited)



|                                                                            |  |                                 |            |   |      |   |            |  
|--------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                            |  | Nine-months ended September 30, |           
|                                                                            |  | 2004                            |            |   | 2003 |  
|Cash flows from operating activities:                                       |  |                                 |            |   |      |   |            |  
|Net loss                                                                    |  | $                               | (2,500,934 | ) |      | $ | (1,149,374 | )
|                                                                            |  |                                
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                 |            |   |      |   |            |  
|Depreciation and amortization                                               |  |                                 | 3,143      |   |      |   | 2,998      |  
|Interest expense related to issuance warrants                               |  |                                 |           |   |      |   | 40,649     |  
|Compensation expense for stock options                                      |  |                                 | 80,136     |   |      |   | 8,480      |  
|Changes in operating assets and liabilities:                                |  |                                 |            |   |      |   |            |  
|Other current assets                                                        |  |                                 | (88,715    | ) |      |   | (64,113    | )
|Due from related parties                                                    |  |                                 | 6,323      |   |      |   | 4,020      |  
|Accounts payable                                                            |  |                                 | 154,248    |   |      |   | (51,624    | )
|Accrued expenses                                                            |  |                                 | (81,040    | ) |      |   | (63,991    | )
|                                                                            |  |                                 |            |   |      |   |            |  
|Net cash used in operating activities                                       |  |                                 | (2,426,839 | ) |      |   | (1,272,955 | )
|                                                                            |  |                                 |            |   |      |   |            |  
|Cash flows from investing activities:                                       |  |                                 |            |   |      |   |            |  
|Purchase of fixed assets                                                    |  |                                 | (1,598     | ) |      |   | (1,854     | )
|Patent costs                                                                |  |                                 | (170,539   | ) |      |   |           |  
|                                                                            |  |                                 |            |   |      |   |            |  
|Net cash used in investing activities                                       |  |                                 | (172,137   | ) |      |   | (1,854     | )
|                                                                            |  |                                 |            |   |      |   |            |  
|Cash flows from financing activities:                                       |  |                                 |            |   |      |   |            |  
|Issuance of common stock                                                    |  |                                 | 2,287,003  |   |      |   | 2,000,000  |  
|Proceeds from exercise of warrants                                          |  |                                 | 1,500,000  |   |      |   | 10,000     |  
|Proceeds from exercise of options                                           |  |                                 |           |   |      |   | 4,150      |  
|Repayment of subscriptions receivable                                       |  |                                 |           |   |      |   | 190,000    |  
|Stock offering costs                                                        |  |                                 |           |   |      |   | (10,000    | )
|                                                                            |  |                                 |            |   |      |   |            |  
|Net cash provided by financing activities                                   |  |                                 | 3,787,003  |   |      |   | 2,194,150  |  
|                                                                            |  |                                 |            |   |      |   |            |  
|Net increase in cash and cash equivalents                                   |  |                                 | 1,188,027  |   |      |   | 919,341    |  
|                                                                            |  |                                
|Cash and cash equivalents at beginning of period                            |  |                                 | 1,019,889  |   |      |   | 474,338    |  
|                                                                            |  |                                 |            |   |      |   |            |  
|Cash and cash equivalents at end of period                                  |  | $                               | 2,207,916  |   |      | $ | 1,393,679  |  
|                                                                            |  |                                 |            |   |      |   |            |  
|Disclosure of non-cash transactions:                                        |  |                                 |            |   |      |   |            |  
|                                                                            |  |                                
|Surrender of common stock for repayment of subscriptions receivable         |  | $                               |           |   |      | $ | 110,000    |  
|                                                                            |  |                                 |            |   |      |   |            |  



The accompanying notes
are an integral part of these financial statements.



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RegeneRx Biopharmaceuticals, Inc.

Notes to Financial Statements

For the three-month and nine-month periods ended September 30, 2004 and 2003
(Unaudited)



|A. | GENERAL
|-- | -------



RegeneRx Biopharmaceuticals, Inc. (the Company), a Delaware corporation, was incorporated in 1982. The Company operates predominately in a single industry
segment, the biotechnology industry. In general, the biotechnology industry consists of researching and developing new pharmaceutical products for the treatment, prevention or diagnosis of medical conditions which may result from infections, cancer,
autoimmune disease, genetic abnormalities, or whose origins may be unknown. The Companys current primary business focus is the commercialization of Thymosin beta 4 (Tb4), a 43 amino acid peptide and principal component of the Companys technology platform. The Company is concentrating its efforts on developing Tb4 for various therapeutic uses such as the treatment of injured tissue and organs and to accelerate the healing of chronic wounds.



The Company currently has no products that have received regulatory approval. During 1997,
the Company entered into a Material Transfer Agreement - Cooperative Research and Development Agreement (CRADA) with the National Institutes of Health (NIH). In exchange for providing Tb4 and certain data, the Company received an option to elect to negotiate for an exclusive or non-exclusive commercialization license from the NIH pursuant to a patent application filed by
NIH in 1998. On February 6, 2001, the Company signed a licensing agreement with NIH whereby the Company obtained an exclusive world-wide license to Tb4
under the 1998 patent application. In exchange for the exclusive license, the Company must make certain royalty and milestone payments to the NIH. To date, all payments due have been made.



The Company anticipates incurring additional losses in the future as it continues development
of Thymosin beta 4 and expands clinical trials for other indications of Thymosin beta 4. To achieve profitability, the Company, alone or with others, must successfully develop and commercialize its technologies and proposed products, conduct
pre-clinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market such technologies and proposed products. The time required to reach profitability is highly uncertain, and there can be no
assurance that the Company will be able to achieve profitability on a sustained basis, if at all.



The Company has incurred negative cash flows from operations since its inception. The Company has expended and expects to continue to expend in the future, substantial funds to complete its planned product development
efforts. The Company expects that its existing capital resources will be adequate to fund the Companys projected operations through June 2005, based on current and projected expenditure levels. Management plans to continue to refine its
operations, control expenses, evaluate alternative methods to conduct its business, and seek available and attractive sources of financing and sharing of development costs through strategic collaboration agreements or other resources. Should
appropriate sources of financing not be available, management would delay certain clinical trials and research activities until such time as appropriate financing was available. There can be no assurance that the Companys financing efforts
will be successful. If adequate funds are not available, our financial condition and results of operations will be materially and adversely affected.



Should the Company obtain substantial additional funding, other factors including competition, dependence on third parties, uncertainty regarding patents, protection of
proprietary rights, manufacturing of peptides and technology obsolescence could also have a significant impact on the Company and its operations.



|B. | FINANCIAL STATEMENTS
|-- | --------------------



The Balance Sheet as of September 30, 2004, the Statements of Operations for the three-month and nine-month periods ended September 30, 2004 and September 30, 2003, and
the Statements of Cash Flows for the nine-month periods ended September 30, 2004 and September 30, 2003, have been prepared without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of
operations, and cash flows at September 30, 2004, and for the periods then ended, have been recorded. All adjustments recorded were of a normal recurring nature.



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The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted
in the United States for complete financial statement presentation. In the opinion of management, such unaudited interim information reflects all necessary adjustments, consisting of only normal recurring adjustments, necessary to present the
Companys financial position and results of operations for the periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full fiscal year. These statements should be read
in conjunction with the financial statements and related notes included in the Companys Form 10-KSB for the year ended December 31, 2003.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reported period. Actual
results could differ from those estimates.



|C. | NET LOSS PER SHARE
|-- | ------------------



Net loss per share is based on the weighted average number of common shares outstanding during the three-month and nine-month periods ended
September 30, 2004 and September 30, 2003. During these periods options and warrants were not included in the calculation as their effect would be antidilutive.



|D. | STOCK BASED COMPENSATION
|-- | ------------------------



In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. This
statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition to SFAS No. 123s fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends
the disclosure provisions in SFAS No. 123 and APB Opinion No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an entitys accounting policy with respect to
stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. The adoption of the disclosure only requirements of SFAS No. 148 did not have a significant impact on the Companys
financial statements.



The Company uses the intrinsic value method for stock
option grants to individuals defined as employees under which no compensation is recognized for options granted at or above the fair market value of the underlying stock on the grant date. The Company uses the fair value method for stock options
granted for services rendered by non-employees in accordance with the SFAS No. 123 Accounting for Stock Based Compensation.



The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123 to
stock-based employee compensation.



|                                                                                                          |  |                                 |            |   |                                |   |          |      |  |   |            |   |  |   |            |  
|--------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------ | - | -------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                          |  | Three Months EndedSeptember 30, |            |   | Nine Months EndedSeptember 30, |  
|                                                                                                          |  | 2004                            |            |   | 2003                           |   |          | 2004 |  |   | 2003       |  
|Pro forma net loss:                                                                                       |  |                                 |            |   |                                |   |          |      |  |   |            |   |  |   |            |  
|As reported                                                                                               |  | $                               | (980,030   | ) |                                | $ | (387,498 | )    |  | $ | (2,500,934 | ) |  | $ | (1,149,374 | )
|Total employee noncash stock compensation expense determined under fair value based method for all awards |  |                                 | (24,493    | ) |                                |   | (25,162  | )    |  |   | (74,200    | ) |  |   | (73,479    | )
|                                                                                                          |  |                                 |            |   |                                |   |          |      |  |   |            |   |  |   |            |  
|Pro forma net loss                                                                                        |  | $                               | (1,004,523 | ) |                                | $ | (412,660 | )    |  | $ | (2,575,134 | ) |  | $ | (1,222,853 | )
|                                                                                                          |  |                                 |            |  
|Net loss per common share:                                                                                |  |                                 |            |   |                                |   |          |      |  |   |            |   |  |   |            |  
|Basic and dilutedas reported                                                                             |  | $                               | (0.03      | ) |                                | $ | (0.01    | )    |  | $ | (0.08      | ) |  | $ | (0.04      | )
|                                                                                                          |  |                                 |            |   |                                |   |          |      |  |   |            |   |  |   |            |  
|Basic and dilutedpro forma                                                                               |  | $                               | (0.03      | ) |                                | $ | (0.01    | )    |  | $ | (0.08      | ) |  | $ | (0.04      | )



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|E. | PATENTS
|-- | -------



The Company has capitalized $170,539 and $-0- related to patent costs during 2004 and 2003, respectively, and are included in other assets. The legal life of a patent is
20 years. The Companys accounting policies for patents are as follows: (a) purchased patents are recorded at acquisition costs (legal fees from a successful defense are also capitalized ) and (b) internally developed patents  the
following costs are capitalized (1) legal fees from the costs incurred in successful defense (2) other patent fees (legal, registration) (3) models and drawings required for registration and legal defense. All research and development costs incurred
in developing the patentable idea are expensed as incurred.



|F. | EQUITY TRANSACTIONS
|-- | -------------------



Sale of Common Stock and Issuance of Warrants



On January 23, 2004, the Company completed a private placement of its common stock. Under the terms of the private placement, the Company sold 2,393,580 shares of common
stock at $.95 per share. In addition, the Company granted 598,397 warrants, each of which is exercisable immediately to purchase one share of common stock at an exercise price of $1.50 per share and has a term of 30 months. The total funds raised in
the private placement totaled approximately $2.3 million.



Exercise of
Warrants



On September 8, 2004, the Company received $1.5 million from
Defiante Farmaceutica, L.d.a., a wholly owned subsidiary of the Italian pharmaceutical group, Sigma-Tau, in connection with the September 6, 2004 exercise of warrants associated with its June 10, 2003 purchase of RegeneRx common stock. Under the
terms of the warrants, Defiante purchased 1,382,488 shares of RegeneRx common stock for $1.085 per share. There were no placement fees associated with the transaction.



|G. | SEGMENT INFORMATION
|-- | -------------------



The Company views its operations and manages its business as one segment, the development and marketing of Tb4. Factors used to identify the Companys single operating segment include the financial information available for evaluation by the chief operating decision maker in making
decisions about how to allocate resources and assess performance.



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ITEM 2. Managements Discussion and Analysis or Plan of Operation



This item should be read in conjunction with the unaudited financial statements and notes thereto of the Company contained in Item 1 of this report. For further information, refer to the audited financial statements
and footnotes thereto included in the Companys Annual Report on Form 10-KSB for the year ended December 31, 2003.



Plan of Operation



Since its inception in 1982, the Companys activities had consisted of conducting research and development, sponsoring clinical trials of its proprietary products, the construction and equipping of laboratory and
production facilities, and the manufacture of products for research, testing and clinical trials. In 2000, the Company adopted a modified business plan calling for the outsourcing of most of the activities necessary to its mission of developing its
Thymosin beta 4 (Tb4) technology for the treatment of chronic wounds. This business model allows for the rapid and efficient deployment of
necessary resources without the burden of expensive and unwieldy infrastructure. It also allows the company to expand or contract its efforts depending on capital resources or other circumstances. The Company has not generated revenues from
operations and does not anticipate generating product revenues or other revenues from operations for the foreseeable future. During the first nine months of 2004, the Company had no revenues and had operating losses of $2,510,924. The Companys
accumulated deficit of $41,680,124 through September 30, 2004 has been funded primarily by the proceeds from the issuance of common stock (and interest earned on such proceeds), the licensing of technology developed or acquired by the Company,
limited product sales and royalties, and the sale of royalty rights. The Company will require substantial additional funding in order to complete research and development activities, manufacturing for clinical trials, and the eventual marketing of
any products that the Company intends to develop.



On June 11, 2003, the
Company completed the sale of 3,184,713 shares of common stock pursuant to a private placement at a price of $.628 per share to Defiante Farmaceutica, L.d.a. (Defiante), a Portuguese company that is a wholly owned subsidiary of
Sigma-Tau, S.p.A., a pharmaceutical company headquartered in Rome, Italy. The Company received approximately $2 million in proceeds. In addition, the Company granted Defiante warrants to purchase up to $1.5 million of additional restricted common
stock of the Company at prices ranging from $1.00 to $1.25 per share (or higher under certain circumstances) over a period of 18 months.



On January 22, 2004, the Company exclusively licensed certain European rights to Tb4 to Defiante. Defiante will develop Tb4 for internal and external wounds in Europe and certain other contiguous and geographically relevant
countries. The Agreement expires on a country-by-country basis upon the later of the expiration of the last to expire of any granted patent in the territory having at least one valid claim covering the products then on the market, the expiration of
any other exclusive or proprietary marketing rights or twelve years from the effective date. Under the Agreement, Defiante will pay the Company a royalty on commercial sales and will exclusively purchase all required Tb4 from the Company. When the Company completes a positive Phase II clinical trial in the United States, Defiante must either pay the Company $5 million or initiate pivotal Phase
III clinical trials in Europe to maintain the license. Defiante also will be obligated to attain future clinical and regulatory milestones in the licensed territory. If those milestones are obtained, certain performance criteria regarding commercial
registration and minimum annual royalties will be required in each licensed country. Such obligations for potential milestones and the related performance criteria to be attained by Defiante are too attenuated at this time to be estimable. The
Agreement does not prevent the Company from sublicensing the technology in countries outside the licensed territory and has no impact on any U.S. rights.



On January 23, 2004, the Company completed the sale of 2,393,580 shares of common stock pursuant to a private placement at a price of $.95 per share to Defiante and
several private investors. The Company received approximately $2.3 million in proceeds. In addition, the Company granted investors warrants to purchase 1 share of common stock for every 4 shares of common stock purchased in the offering at a price
of $1.50 per share over a period of 30 months.



On September 6, 2004, Defiante
exercised warrants to purchase $1.5 million of restricted stock at an average price of $1.085 per share that were associated with the June 11, 2003, private placement.



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The Companys strategy is to independently develop Tb4 in the United States for chronic dermal wounds through completion of Phase II or initiation of Phase III clinical trials. Although the Company has no products that have received
regulatory approval to date, the Companys Investigational New Drug Application was accepted by the United States Food and Drug Administration in December 2002 allowing the Company to commence the human testing of Tb4 for dermal wounds. The Company initiated a Phase I human clinical trial in March 2003, which studies were designed to establish safety in human subjects, and successfully
completed the trial in September 2003. There were no significant adverse events associated with the drug in Phase I and results demonstrated it was well tolerated by all subjects.



During the first half of 2004, the Company initiated and completed expanded animal studies in preparation of submission of its first Phase
II IND application to test Tb4 in patients with chronic pressure ulcers. The Company filed the IND amendment in September 2004 and was cleared to
initiate the Phase II trial in October 2004. The Company has recently raised additional capital which it is using, in part, to initiate its Phase II trial program consisting of four - six separate clinical trials. The Company believes the Phase II
trials, which it hopes to conduct in a step-wise, parallel fashion, will take approximately 12-18 months and will cost over $3 million. The Company expects to pay for such trials from (i) current capital, (ii) additional capital it intends to raise
in the future, (iii) its partner, Sigma-Tau, that has committed to pay for one of the Phase II trials  a study in patients with venous stasis ulcers to be conducted in Europe, and (iv) from proceeds of a grant submitted to the U.S. FDA Office
of Orphan Products, which the Company hopes to receive in January in 2005, specifically for a Phase II trial in patients with epidermolysis bullosa.



At September 30, 2004, the Company had cash and cash equivalents totaling $2,207,916 and working capital of $2,087,377 and total assets were $2,549,231. The Company
believes that its cash balances will be sufficient to sustain current operations at least through June 2005. The Company is currently pursuing several potential financing alternatives for continued funding of its research, development and clinical
trials programs. There is no assurance that the Company will be able to raise additional capital necessary to timely execute its current plan of operation or continue such a plan of operation beyond June 2005 unless substantial additional capital is
raised.



As the Company utilizes an out-sourcing operating strategy it does not
currently expect to purchase or sell any properties. However, due to its expanding clinical trial program and implementation of additional Sarbanes-Oxley requirements in 2005, the Company may increase its staff by two or three additional employees.
For more information about the Companys virtual company strategy, see Item 1. Business of the Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003.



Forward-looking Statements



When used in this Form 10-QSB and in future filings by the Company with the Securities and Exchange Commission, in the Companys press releases or other public or
shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases will likely result, are expected to, will continue, is anticipated,
estimate, project or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to certain
risks and uncertainties, that could cause actual results to differ materially from historical results and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any forward-looking statements,
which speak only as of the date made. The Company wishes to advise readers that various factors could affect the Companys financial performance and could cause the Companys actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current statements. These factors include, but are not limited to, the following: the Companys lack of revenues and history of losses; uncertainties related to the
Companys limited capital resources; risks associated with the development of the Companys products; uncertainties related to the regulatory process; the Companys lack of product diversification; the Companys dependence on
collaborative relationships with larger partners for the development, manufacturing and marketing of its products; reliance upon key personnel; the Companys ability to obtain and protect intellectual property rights; and competition. The
Company does not undertake, and specifically declines any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.



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##### Table of Contents

Item 3. Controls and Procedures



As of the
end of the period covered by this report, based on an evaluation of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) the chief executive and financial
officer of the Company has concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and
reported within the applicable time periods specified by the SECs rules and forms.



There were no significant changes in the Companys internal controls or in any other factors that could significantly affect those controls subsequent to the date of the most recent evaluation of the
Companys internal controls by the Company, including any corrective actions with regard to any significant deficiencies or material weaknesses.



PART II  OTHER INFORMATION



Item 1. Legal Proceedings



None



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



None



Item 3. Defaults Upon Senior Securities



None



Item 4. Submission of Matters to a Vote of Security Holders



None



Item 5. Other Information



None



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##### Table of Contents

Item 6. Exhibits



| | (a) | Exhibits
| | --- | --------



|            |  |                                                                                                                                |  |                                                                                                          
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                         |  | Reference*                                                                                               
|3.1         |  | Restated Certificate of Incorporation of the Company                                                                           |  | Exhibit 3.1 to Registration Statement No. 33-9370, Amendment No. 1 (filed November 26, 1986)             
|            |  |                                                                                                                               
|3.2         |  | Amendment to Restated Certificate of Incorporation of Company                                                                  |  | Exhibit 3.2 to the Companys Transitional Report on Form 10-K, File No. 0-15070 (filed March 18, 1991)   
|            |  |                                                                                                                               
|3.3         |  | Amendment to Restated Certificate of Incorporation of Company                                                                  |  | Exhibit 3.3 to the Companys Form 10-KSB, File No. 0-15070 (filed April 2, 2001)                         
|            |  |                                                                                                                               
|3.4         |  | Bylaws of Company                                                                                                              |  | Exhibit 3.2 to Registration Statement No. 33-9370 (filed October 8, 1986)                                
|            |  |                                                                                                                               
|3.5         |  | Amendment No. 1 to Bylaws of Company adopted August 11, 1989                                                                   |  | Exhibit 4.7 to Registration Statement No. 33-34551, Amendment No. 3 (filed June 21, 1990)                
|            |  |                                                                                                                               
|3.6         |  | Amendment No. 2 to Bylaws of Company adopted June 18, 1990                                                                     |  | Exhibit 4.8 to Registration Statement No. 33-34551, Amendment No. 3 (filed June 21, 1990)                
|            |  |                                                                                                                               
|3.7         |  | Amendment No. 3 to Bylaws of Company adopted November 30, 1990                                                                 |  | Exhibit 3.6 to the Companys Transitional Report on Form 10-K, File No. 0-15070 (filed March 18, 1991)   
|            |  |                                                                                                                               
|4.1         |  | Form of Stock Certificate                                                                                                      |  | Exhibit 4.1 to Registration Statement No. 33-9370, Amendment No. 1 (filed November 26, 1986)             
|            |  |                                                                                                                               
|4.2         |  | Rights Agreement, dated as of April 29, 1994, between the Company and American Stock Transfer & Trust Company, as Rights Agent |  | Exhibit 1 to the Companys Current Report on Form 8-K, File No. 0-15070 (filed May 2, 1994)              
|            |  |                                                                                                                               
|4.3         |  | Warrant Agreement, dated March 12, 1997                                                                                        |  | Exhibit 4.3 to the Companys Annual Report on Form 10-K, File No. 0-15070 (filed March 31, 1997)         
|            |  |                                                                                                                               
|4.4         |  | Warrant Agreement, dated January 23, 2004                                                                                      |  | Exhibit 4 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)
|            |  |                                                                                                                               
|10.1        |  | Patent License Agreement  Exclusive, between the U.S. Public Health Service and the Company                                   |  | Exhibit 10.1 to the Companys Form 10-KSB, File No. 0-15070 (filed April 2, 2001)**                      
|            |  |                                                                                                                               
|10.2        |  | Amended and Restated Directors Stock Option Plan                                                                               |  | Exhibit 10.25 to the Companys Annual Report on Form 10-K, File No. 0-15070 (filed March 26, 1993)       
|            |  |                                                                                                                               
|10.3        |  | Amended and Restated 2000 Stock Option and Incentive Plan                                                                      |  | Filed as Exhibit A to the Companys definitive proxy materials, File No. 0-15070 (filed May 20, 2002)    



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|      |  |                                                                                        |  |                                                                                                                                        
|----- |  | -------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                       
|10.4  |  | Unit Purchase Agreement dated March 12, 1997                                           |  | Exhibit 10.25 to the Companys Annual Report on Form 10-K, File No. 0-15070 (filed March 31, 1997)                                     
|      |  |                                                                                       
|10.5  |  | Registration Rights Agreement, dated March 12, 1997                                    |  | Exhibit 10.26 to the Companys Annual Report of Form 10-K, File No. 0-15070 (filed March 31, 1997)                                     
|      |  |                                                                                       
|10.6  |  | Lease Agreement dated April 5, 2002 between the Company and HQ Global Workplaces, Inc. |  | Exhibit 10.7 to the Companys Annual Report on Form 10-KSB, File No. 0-15070 (filed March 31, 2003)                                    
|      |  |                                                                                       
|10.7  |  | Employment Agreement                                                                   |  | Exhibit 10.8 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)                           
|      |  |                                                                                       
|10.8  |  | Employment Agreement                                                                   |  | Exhibit 10.9 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)                           
|      |  |                                                                                       
|10.9  |  | License Agreement                                                                      |  | Exhibit 10.10 to the Companys Registration Statement on Form SB-2, Amendment No. 3, File No. 333-113417 (filed July 15, 2004) **      
|      |  |                                                                                       
|10.10 |  | Securities Purchase Agreement                                                          |  | Exhibit 10.11 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)                          
|      |  |                                                                                       
|10.11 |  | Master Services Agreement                                                              |  | Exhibit 10.12 to the Companys Registration Statement on Form SB-2, Amendment No. 1, File No. 333-113417 (filed April 23, 2004)        
|      |  |                                                                                       
|31.1  |  | Certification dated November 14, 2004                                                  |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)                                               
|      |  |                                                                                       
|32.1  |  | Certification dated November 14, 2004                                                  |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

---

|*Except | where noted, the exhibits referred to in this column have heretofore been filed with the Securities and Exchange Commission as exhibits to the documents indicated and are hereby
incorporated by reference thereto. The Registration Statements referred to are Registration Statements of the Company.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|**Portions | of this document have been omitted pursuant to a request for confidential treatment
|---------- | -----------------------------------------------------------------------------------



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SIGNATURES



In accordance with the
requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |                                                                   
|----------------------- |  | ------------------------------------------------------------------
|                        |  | RegeneRx Biopharmaceuticals, Inc.                                 
|                        |  | (Registrant)                                                      
|                        | 
|Date: November 14, 2004 |  | /s/ J.J. Finkelstein                                              
|                        |  | J.J. Finkelstein                                                  
|                        |  | President, Chief Executive Officer and Principal Financial Officer



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